Making Tax Digital for VAT pilot: HMRC asks firms for volunteer clients

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HMRC has asked accounting firms for volunteer businesses from their client base to apply for its Making Tax Digital for VAT pilot. However, concerns remain about the availability and significance of the software that will be used.

The pilot is slated to begin in April 2018, with a small number of selected businesses submitting their VAT returns via the new system.

According to an HMRC statement, the tax authority will then monitor the progress of the submitted VAT returns to ensure the system is working as expected before the service is opened up to further businesses, individuals and landlords.

“All you need to do is submit your VAT return using the new system,” HMRC said in a statement. “You’ll have access to plenty of help if you need it and will be able to check you’re doing things right as you go along.”

What are the benefits?

HMRC’s statement highlighted a number benefits to businesses of taking part in the scheme, including:

  • The opportunity get used to the new VAT return system before it becomes mandatory
  • Having access to more support from HMRC
  • Being kept personally up to date with what is happening as the service develops
  • The ability to influence how the service looks and feels

The Revenue also outlined that businesses would be put under no greater scrutiny by taking part, as monitoring would be for testing only; there are no additional compliance checks. Businesses would also be free to leave the trial at any time.

Software questions

According to an ICAEW statement, HMRC has told them that even if a business does not currently use software they will be able to access the pilot by working with a suitable supplier to ensure it has access. How this will work in practice remains unclear at this stage.

In spite of HMRC’s assurances, industry insiders have also questioned whether the software capabilities will exist for businesses to be able to file their VAT returns.

A number of software houses that spoke with AccountingWEB said their products would not be ready for the April start date.

Thomson Reuters’ tax product manager Mark Purdue said that while his firm is planning on taking part in the scheme, its MTD for VAT product is likely to make its first submission later on in the year.

“Our focus is still on tweaking around GDPR. As important as the pilot is, we’re not going to launch a product that’s not ready,” said Purdue. However, he was confident that there will be suppliers taking part in the trial from day one.

An HMRC spokesperson told AccountingWEB: “We are working with a large number of software developers who are developing products and several are planning to have products available from the start of the pilot, with a pipeline of further products to follow.” 

Chris Wade, Sage’s UK VP of product, said that some of the software house’s flagship products are likely to be ready from the start of April, and the firm will be actively recruiting participants for the pilot.

According to Wade, two of the firm’s leading products Sage Business Cloud and Sage 50 Cloud will be ready to submit VAT returns, although exact timings have yet to be finalised.

 

If you or your clients wish to express an interest in the trial, contact HMRC at [email protected]. HMRC will then send you a short survey which will help them establish specific features about the business in order to manage the trial period.

About Tom Herbert

Tom is editor at AccountingWEB, responsible for all editorial content on the site. If you have a story that might interest us or wish to comment on the site's coverage get in touch via the site's private message function or Twitter DM (@AWebTom)

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05th Feb 2018 11:57

Turkeys? Christmas?

Thanks (3)
By Tornado
05th Feb 2018 13:50

I know that I have said this before on a number of occasions on AWEB, but I think HMRC should spend a large proportion of their £1200 milllion MTD budget on commissioning top quality software from a consortium of leading developers and then make that software available for all to use at no cost.

This would ensure that the software is developed to do exactly what HMRC require and also enable ongoing bugs to be efficiently sorted out during use.

There are numerous significant benefits for everyone if we were all using the same software, particularly if it is cloud based, and would make the concept of moving to MTD much more attractive to many.

Ultimately, there is only one way to arrive at the results that HMRC are looking for so why spread this function across numerous software packages when all you need is one top quality package provided by the Government.

I would also add from where I stand, I still cannot see MTD for VAT being mandatory in April 2019 and I think a more realistic approach would be to simply make it optional for several years.

Why the rush?

As far a taking part in these trials is concerned, I would (and have on occasions) take part in beta testing but I see no advantage whatsoever in this particular approach to MTD. Give me a realistic time scale and some confidence in the concept, plus some real incentive, then it would be different, but at the moment all I can see is a lot of unpaid time to help software developers make huge profits out of my efforts.

Thanks (5)
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By Vidpark
to Tornado
05th Feb 2018 14:52

Agree with many of your sentiments but my understanding that this is primarily a trial of the HMRC system not what the commercial software developers have done.
You can view your efforts as a community service rather than a profit supplement for the software industry.

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By Tornado
to Vidpark
06th Feb 2018 09:25

"You can view your efforts as a community service rather than a profit supplement for the software industry."

I cannot do that as it is not a community service.

On the other hand, if the Government were developing and supporting the universal software that I described, then I would have no hesitation in supporting its development for free as there would be no doubt that millions of people, their businesses and the Government would benefit from such software.

It is not rocket science., just common sense that is not influenced by vested interests.

Thanks (5)
By DJKL
to Tornado
05th Feb 2018 15:12

Divide and rule.

If HMG produced the accounts software and the interface there is nowhere to hide if problems arise, however if HMG create the interface and software companies do the software then blame can be spread if things do not work out as planned (and if HMG involved they likely will not)

Politicians/ Civil Servants may not be smart but they are sneaky, if it works grab the credit if it does not have someone to blame.

Thanks (2)
By Tornado
to DJKL
05th Feb 2018 17:27

There are a number of factors why the Government will not provide free software, one of which could easily be the reason you give, but in spite of the indisputable logic of my argument, I think the main reason that we will be left to the mercy of commercial exploitation is that the Government will not do anything to hinder the software developers. The vested interests are just too powerful.

Thanks (1)
05th Feb 2018 15:09

I took part in the BETA PAYE system. Wish I hadnt. Since then I've not been able to see clients details under the PAYE section of the agents site.
Only clients for whom I submit CIS returns show the correct info. For some clients nothing is shown although FPS and EPS's have been submitted correctly.
Its been like this since the system went live. I've complained more than once and sent screenshots. Then in Nov last year I received this...
"This is a known issue affecting a small number of agents who have signed up for the Agent Services BETA trial and changed their business name. A resolution to the problem has been identified, however, we are unable to give a specific time frame as to when this will be deployed."
My firm has not changed its name - been the same for 30 years.
I've heard nothing since - I still cant see whether clients have paid the correct PAYE etc. Nothing.
So I've given up and no... I wont be volunteering and I will make damn sure none of my clients do either.

Thanks (11)
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to Jennifer Adams
05th Feb 2018 17:05

Sheesh Jennifer! What a horrifying and worrying account! You've been badly treated and how. You have my sympathies.
Chris.

Thanks (1)
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to Jennifer Adams
07th Feb 2018 14:24

That is very bad (and the sort of risk that keeps me out of this kind of trial). They should be paying you vast compensation for the damage you have suffered.

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By sam t
to Jennifer Adams
08th Feb 2018 15:39

I totally agree Jennifer, I'm having problems with the BETA PAYE system too and it's not as if they take any notice of the feedback I send them - I'm certainly not wasting any more time on HMRC BETAs!

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06th Feb 2018 08:49

Why on earth would anyone want to be part of this pilot.

I see very little upside and a load of hassle on the downside.

Good luck to any brave guinea pigs out there!

Thanks (1)
06th Feb 2018 15:24

I am still surprised any developers are interested given the whole thing is likely to be pulled back another 12 months, and another 12 months......

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By tom123
06th Feb 2018 16:39

I am concerned - we use Sage 200, which is decent software, but I am unable to upgrade to the very latest version, as that requires upgrades to all the rest of the infrastructure - new MS office licences, new email servers, etc etc.

I worry that, unless I have the very latest version, I will not be able to obtain the MTDfVAT process.

The stupid thing is the existing data entry into VAt online actually works...

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to tom123
07th Feb 2018 10:57

The even more stupid thing is that the system of typing data into the online VAT form will continue in parallel to MTD for VAT , as it has to be in place for those who are voluntarily registered for VAT with turnover under £85,000.

Thanks (1)
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to tom123
07th Feb 2018 14:27

This part of my worry too. I rent nothing just about (not even a car and certainly not Word etc software). I buy one off. I have had a quick look at these kinds of software products and they all seem to cost more than my current systems (which cost nothing). I see no upsides for me at all and just a lot of on going cost. The product if it must be forced on me next year should be free and provided by HMRC and they should undertake fully to indemnify and hold users harmless against all loss, including hacking caused by their imposing the new system on people who do not want it.

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07th Feb 2018 14:28

I will wait in the wings. My last firm used to make sure it always had the second last software product, not latest version on the basis it was cheaper and tried and tested - all the bugs sorted out first. Wise plan.

This is going to be a big change for me next year as I don't even use excel for my impeccable accounts and certainly not any cloud storage. They will have to drag me kicking and screaming into it I suspect. It will not be fun and I bet it will cost me a small fortune.

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By Tornado
to EnglishRose
07th Feb 2018 14:44

In a country where 'inclusivity' is the buzz word, MTD is a blunt instrument that ignores the needs of those that are not suited for that kind of system.

What a load of hypocrisy being dumped on us by the Government and those that have no feelings of guilt and shame.

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08th Feb 2018 09:06

What happened to the promise that we could use spreadsheets for MTD ???

Thanks (0)
15th Feb 2018 13:25

Here's a novel idea why don't HMRC ask for volunteers from their customers (taxpayers) after all 90% of them have no idea that this is coming!

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